A quarterly magazine of urban affairs, published by the Manhattan Institute, edited by Brian C. Anderson.
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Showdown in Madison « Back to Story
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The Wisconsin state pension fund is not in good shape. A study by the Manhattan Institute shows that the fund is $10.9 billion underfunded (just for the teachers!) in 2009 with only 72% of its liabilty funded. It seems that the Democrat politicians who used to run things, selected investment returns far in excess of reality in order to say that there was excess funding in the pension funds.
This might have been a more complete and balanced article if you had addressed the cynical politics of who was not included as part of "most public employees". The governor has provided no credible explanation or justification for leaving police and fire out of the fun, and it is hard to conclude anything other than that it was due to fear of loss of support- if the governor were taking a principled rather than political stand, it would seem they would be included.
Shattering expectations is painful -- including the expectation by our wealthiest citizens that they should get tax cuts in a time of crisis rather than sharing the burden for a return to fiscal health.
As an NBCT teaching in Wisconsin I can understand the comments of Mr. DiSalvo; I understand the arguments. While there are going to be some tough years for schools and teachers in Wisconsin--and for government institutions--this is not the end of the world.
I'd rather face the painful truth and the cuts than postpone them yet again and make them worse. But there is something else which is equally important in Walker's bill: this is the idea that a union should have to treat me like a customer who might not return if he doesn't like the service. Each year my dues have gone up, but service has not. I'd like an honest yearly accounting or where my money will be spent--and some vague outline about how is is generally filtered to people in Madison or elsewhere who do not know me. I'd like my union to be first a professional resource and not a political animal.
I don't look forward to lower take-home pay; neither did the workers of Harley or Kohler, but there are things I like about Walker's reality check in Wisconsin.
as a 35 year member of the International Brotherhood of Union Ironworkers i am ashamed to call myself union, due to these people. if i ever went to a job and performed badly i would be fired and if bad enough the union would see to it i never received another job opportunity. the fact teachers and their governmental ilk cannot be fired proves, the union label is failing and badly. 8 hours pay for 8 hours work kept me employed
Why the different treatment for the unions that supported Walker, i.e., Police and Fireman?
It may be philosophical, but it is also disingenuous. the governor manufactured the 'debt crisis' by slashing taxes for the wealthy. He already has consent to reduce civil servant wages & benefits to bridge this gap, so why does he pretend that union-busting is a critical fiscal issue? It is not. It's union-busting, pure and simple. Part of the return to the Golden Age of the Robber Barons.
I agree that public employees should not have the same right to organize that private employees have. The reason is that private business and their organized labor partners are limited by the reality that they must remain profitable, produce a competitive product at a competitive price to survive. The auto industry is a good example of what happens when labor and management do not take this into account when negotiating contract terms.
In the public sector, there is no profit factor to provide that limiting sanity. The functional offset is simply the limitless power to tax the other guy or gal. This is a devisive but dramatic public policy issue that has resulted in the increase in the power of public workers at the expense of the private worker's ever increasing tax burden and ever dimishing influence in the ballot box. In essense, politicians have learned to play to the hand that feeds them at the ballot box. This is fundamentally corrupting our system of governance. This is not an appearance of a conflict-of-interest but the real thing. I like what the brave people of Wisconsin are doing and hope that this spreads across this great country, including the federal government.
A point made by Gov Walker that needs to be reiterated is the fact the largest impact of the collective bargaining issue will be with the local municipalities. Without that component, these cuts only impact the state level, and therefore the pain is pushed to the local entities who would be hamstrung by the collective bargaining. It is happening in NJ where the State makes cuts and rules and the local towns can't do anything but raise taxes or cut employees. This is the appropriate step to truly cut all taxes for everyone.
If there are States with less powerful public sector unions, how are their budgets doing? Are these States less costly and more effective?
I am receiving contradictory information concerning the tax situation in WI, and I am curious; what would you consider as wages "wildly out of sync" with general salaries in WI?
This confrontation was inevitable, as are those that are necessarily going to follow. It took no swami with a crystal ball to see the unionst homeymoon, like them all, would have to end,and bitterly, like some.
I wanted to add to my last comment that the campaign contributions from the Unions are 95% Democrats, 3% Republicans, 2% other. This is why the Democrats fled the state and did not want to vote. They are compromised. Anita
"Most...workers are regular Americans who have played by the rules and developed certain expectations. Shattering those expectations is painful."
A huge portion of the workers are regular Americans, that's so. I am a regular American and owned and operated a small business until I retired. But with the downturn in the economy, I saw my savings dry up. Interest on my savings across the board is nonexistent. Who can I appeal to in order to get my savings back? Does anyone in government or the unions think that the rest of us are not suffering with a smaller income that we had planned on? My expectations had to be downsized, therefore there are things that I planned to do with money that I had saved that I can no longer do. Remember, I am saying that I saved, my husband saved but we had to lower our expectations just as the union worker will do if they're smart. And I will certainly vouch that lowering our expectations is painful but, tell me, just what are other regular Americans doing? Biting the bullet. The gravy train is coming to a halt and taxpayers should not have to pay for the union member to have a higher standard of living than the one paying the tab!
I disagree with Mr DiSalvo in part. That in collective bargaining with government employees there is no one at the other side of the table. Management, I presume is in this case, one of the largest mismanagements because they do not have to worry about profits as a business must and they themselves receive vast amounts of money from the Unions for their campaigns and therefore don't have incentives to fight any of the Union proposals that are for the benefit of their 'employees' and mostly do not benefit the people that they are supposed to represent. The populace is left out of not only of the collective bargaining, they are never informed that there is something being bargained. Namely their futures and their tax dollars.
Our representatives should not be accepting money from Unions as they are in 'conflict of interest'. It is the same as a bribe.
Also, The additional expenditures that Scott Walker made are for the benefit of entire population of Wisconsin, not just a small faction of government workers. Anita
Delighted to see City Journal take a closer look at this. The statement that the state was in surplus, then put into deficit by tax cuts by Gov. Walker, requires correction, however. (This is a talking point that originated last week, citing to a memorandum of Wisconsin's Legislative Fiscal Bureau, but relying on an interpretation that could be supported only if the memorandum was not read all the way through and/or if the accounting aspects were not understood.) The $137M deficit remaining for the balance of the fiscal period (ending June 30, 2011) comes from obligations for payments due to Minnesota and to replenish a victims' compensation fund that Walker's predecessor had used to plug the prior deficit, and other state program deficits. The newly enacted tax cuts, on the other hand, affect the 2011-2013 biennium. The Milwaukee Journal Sentinel fact-checked this last week [ http://www.politifact.com/wisconsin/statements/2011/feb/18/rachel-maddow/rachel-maddow-says-wisconsin-track-have-budget-sur/ ], although it seems not soon enough for Ezra Klein, who had to walk back his echo of the talking point [ http://voices.washingtonpost.com/ezra-klein/2011/02/unions_arent_to_blame_for_wisc.html ].
This is a fair article, contrary to most of what is written on this topic.
It seems to me that everything in America is broken, that all the countries institutions sructured themselves like ponzi schemes.
Greed seeped into the national character, both sides of the political divide want prosperity to be paid for by someone else, and what is left is a colossal mess.
Worst of all is the dearth of leadership, there seeems to be no will to work together to solve problems.
Yet the world goes on without you.
While I appreciate the views exhibited by 'both sides', what I find most alarming is the behavior of the Wisconsin senators who fled the state.
If these elected officials were in the military, they would be arrested, tried, and convicted of 'derelition of duty' (cowardly behavior).
The people of of Wisconsin should immediately 'recall' these legislators, and subsequently deny them any pensions and health care insurance benefits they might have been 'entitled' to in the future.
"But why is it that no one ever refers to the great economies of the 50's up to Reagan? Union membership was at about 32% versus 7% today, the middle class ( the 'demand' sector of our formally demand based economy) thrived, and we were the envy of the world."
The answer is demographics. In the 50's the USA was a young country, with a baby boom generation of actual babies. Housing boomed, sales of cars, furniture, washing machines, all the durable goods needed by big families were in demand.
The USA is now an old country, demographically. And we have spent and borrowed and borrowed and spent from generations not even born yet. Paying just the interest on our debt is going to crush us.
If the members of public employee unions In Wisconsin are dissatisfied, I suggest they come to California where the pay and benefits are higher and the Governor and Legislature are "out to lunch" Of course, I can't guarantee how long they will stay at lunch or if theyt will have enough money for the tab.
"Most...workers are regular Americans who have played by the rules and developed certain expectations. Shattering those expectations is painful." and WE ALL have to learn to live with them. Private companies have long ago done away with pensions and their employees put away their own money in a 401k and if they are lucky their employer contributes 1-3% of what they put away. Private companies expect their employees to pay a bigger share of their own health care insurance. None of this is new, except to the "entitled" public employees. Wake up!!! Stop whining, pick yourself up and figure out how to take care of your selves like the rest of us have had to. The American taxpayer can no longer afford spoiled, unaccountable, and apparently logically clueless employees. Think about it. If it sounds too good to be true, it can't last. The day of reckoning has arrived and the American taxpayer is no longer going to take it. They refuse to give public employees sweetheart deals. They need to live like the rest of us. Change is inevitable and it happens to everyone. Live with it!
Democracy has to mean a lot more than going to the polls to vote for preselected candidates. It also means having a chance to negotiate with the employer (public or private) over wages, benefits, safety, seniority, due process on discipline procedures, steward representation during investigatory and disciplinary procedures, retirement, etc. With few exceptions, collective bargaining is the only way to effectively do this.
Who elected unions, you ask? Their members did. Who elected the Koch brothers? We are supposed to be a one person, one vote nation. Yet, corporations and individuals with millions or billions of dollars can easily "out-vote" millions of citizens by drowning out competing voices. If unions mobilize their resources to support candidates who are more likely to vote in the interests of, not only unions but average folks in general, who are you to condemn them? Take corporate money out of the game before you complain about union power.
Good pro-taxpayer points, but it would enhance the appeal of this approach if the Republicans (or any party) would argue for similar discipline on the "talent" working for TBTF banks, which are de facto GSEs supported and guaranteed by American taxpayers. These folks have unlimited taxpayer guarantees that seem as excessive as public sector employee benefits. Let's be consistent, simplify and limit our tax obligations, and not let subsidies to any industry crowd out other priorities.
This is long, long, overdue.
This was needed in California 20 years ago.
If this had occured in California 20 years ago, California would not today be the poster boy for a State with a broken budget.
Hopefully Governors and Legislatures in every one of the 50 states will follow up on Wisconsin's lead on this issue.
There is another issue. The tax payer provides the wages for both the governor, and all state employees, including the unionized state employees.
The only persons the tax payers vested any power in is the Governor and the legislators. All others have been hired by the elected officials.
Unions have no right to override the elected officials and try to control tax money by demanding more wages from taxes and thus allocating tax money for their own use and not as the tax payers mandate.
There should be no unions in government. Those elected by the tax payers are the only ones who should control tax money.
If elected officials decide unions are appropriate in government, hopefully, that was done because the tax payers indicated they wanted that. And when tax payers indicate they do not want unions, the unions have no right to demand they remain against tax payer will.
We see little of it these days, but government is for the citizens, not the citizens for the government.
Wish the union members good tidings, enforce their requirement to report for work, offer counselling if they are having trouble adjusting to their new wage level, and disolve the organized labor unions.
As a union worker and Civil Servant, you make some points. But why is it that no one ever refers to the great economies of the 50's up to Reagan? Union membership was at about 32% versus 7% today, the middle class ( the 'demand' sector of our formally demand based economy) thrived, and we were the envy of the world. Supply side economies do not work. Period. The Wisconsin situation is simply a Governor, thru funding by the now famous Koch brothers, attempting to bust the unions... the last bastion of funding for the Democratic party. It was easy to defeat private sector unions... simply move the jobs overseas. No-can-do to government and state jobs though. The vitriol and lies are really getting old.
Does the faculty at the Univ of Wisconsin have collective bargaining? If doctors and lawyers can have their guilds, associations, that set standards and make sure their members get the right pay, why should public workers not have a similar right? Public unions are not allowed to strike, unlike private unions.
it's an interesting conundrum, I have been anti union all my life, I inherited that aspect from my mother. however unions do have much to ask for as do elected officials and the key to a true democracy in my book is balance. equality and balance, what is good for the goose, government, is also good for the gander, the constituency. both sides need to sit down and acknowledge we have a problem, it in not only wisconsin or america, it is global. as we are seeing in the middle east "we the people" will only take so much pain before they stand up and take action. so goes tunisia goes all tyranny.
Are Walker's tax cuts already in effect? It seems to me that unless those tax cuts are reducing revenue today, they cannot be factored into the size of the current deficit.